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Bitcoin Dip to US$75K Possible After EU Returns Fire On Tariffs
- In response to Trump’s introduction of 25% tariffs on all steel and aluminium products, the EU will introduce tariffs of its own against a range of US products starting in April.
- Analysts suggest this trade conflict could see market uncertainty continue at least into April, potentially seeing Bitcoin’s price fall below the key support level of US$75,000.
- Since Trump’s inauguration both traditional and crypto markets have tumbled as ongoing chaos around his tariff plans have eroded market confidence and kept investors on the sidelines.
Trump’s trade tariffs continue to cause market mayhem in both traditional and crypto markets and analysts warn the chaos is likely to continue at least into April. It doesn’t bode well for BTC.
Following the introduction by the US of 25% tariffs on all steel and aluminium imports, the European Union (EU) yesterday announced plans to slap tariffs on US$28 billion (AU$44.2 billion) worth of US goods starting April 1. Analysts suggest this move could weaken global investors’ risk appetite even further and see Bitcoin’s price decline again, possibly even breaking its key support level of US$75,000 (AU$118,609).
There are also fears the EU’s retaliatory tariffs could spark a trade war with the US, as both sides repeatedly apply tit-for-tat trade restrictions, weakening markets further.
Related: Crypto Banter Says Trump Tariff War Has Major Impact on Crypto Market
EU’s “Rebalancing Measures” In Response to US Tariffs
The EU announced its retaliatory tariffs yesterday, immediately after the US announced it will be implementing its 25% tariffs on steel and aluminium products from the EU (as well as all other nations, including Australia).
The EU said it will begin imposing its “rebalancing measures” from April 1 of this year. These measures, which include tariffs against a range of US products, were partially introduced during Trump’s first term as president. The EU says this time “they’re going to be implemented in full.”:
Tariffs will be applied on products ranging from boats to bourbon to motorbikes.
EU media statement
The EU said the objective of its response is to “ensure that the total value of the EU measures corresponds to the increased value of trade impacted by the new US tariffs.”
How Might These Tariffs Impact Bitcoin?
Speaking to Cointelegraph, Aurelie Barthere, principal research analyst at on-chain analytics platform Nansen, said the tariff disputes are likely to limit investor appetites for risk-on assets like Bitcoin until at least early April:
Tariff noise is likely to continue till after April 2, and the reciprocal tariff announcements, and then negotiations, and put a lid on risk appetite.
Aurelie Barthere, Principal research analyst at Nansen Barthere also noted, though, that both traditional and crypto markets seemed to have “tentatively” stabilised yesterday.
Meanwhile, Marcin Kazmierczak, chief operating officer at modular oracle provider, RedStone, suggests that the EU’s counter-tariffs could be the start of an ongoing trade war:
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Counter tariffs aren’t a positive signal as they suggest a potential bounce back from the other side again.
Marcin Kazmierczak, Chief operating officer at RedStone Kazmierczak said an ongoing dispute could see Bitcoin fall below its crucial support level of US$75,000, but he believes it’s likely to rebound from this low:
Given stablecoins and RWAs [real world assets] remain at all-time-highs, it has the potential to rebound. I don’t believe that news will have a strong impact for now, but we’ll observe the response on the US end.
Marcin Kazmierczak, Chief operating officer at RedStone Related: Trump Induced Economic ‘Death Spiral’ Sends Bitcoin Below $80k as Analysts Weigh In
According to data from CoinGecko since the self-described “very stable genius” returned to the White House on January 20, Bitcoin has fallen by over 20%, while on traditional markets the S&P 500 is down about 8% and the NASDAQ’s down just under 10%.
Are we tired of winning yet?
Author
Jody McDonald
Jody is a Brisbane-based freelance writer who specialises in writing about business, technology, and the future of work.
